Single Parents
Every parent knows that the act of parenting is as challenging as it is rewarding. One of the main challenges that face a parent is knowing whether or not you're screwing it up!
This is one of the reasons why being a single parent is an extraordinary hire-wire act. Not only do you need to concern yourself with the physical and emotional well-being of yourself and your child - no small feat, in and of itself. But you must also worry about the finances of your family. And - if we're being realistic here - you must also be aware of what would happen to your child if something awful were to happen their primary caregiver: you.
So let's have some real talk about life insurance, and take a look at some reasons why getting a quote - at the very least - would be beneficial to you and your family:
If the single parent dies, there may be no clear next choice as to who will help pay the bills or care for the children.
The act of obtaining Life Insurance is beneficial to every household. That's because the act of obtaining life insurance requires a close and careful examination of your current finances, and some serious thought of future scenarios that would play out if the family's breadwinner (or, in some cases, non-breadwinner) were to no longer be around.
This is doubly true of single-parent households. It might sound obvious, but it is very important for single parents to acknowledge the absence of a "backup parent."
Unlike in a two-parent household, if the single parent dies, there may be no clear next choice as to who will help pay the bills or care for the children.
Life insurance can provide a financial safety net that might not otherwise be there to help facilitate answering some hard questions.
Sadly, the people who need life insurance most seem to be the ones who have it the least. A study by Genworth found that 69% of single parents with kids still living at home had no life insurance in place. You can compare this to the 45% of double-parent households that do not have active life insurance.
If you are a single parent, it is time to make a plan to make sure you know that your family is correctly covered.
Life Insurance can help keep some major things consistent about your child's life -- in a moment where they'll need it most.
It's awful to think about, but imagine it - if you can. Your child is suddenly thrust into a world without you. What would you want them to have? How could you provide some normalcy to a life that no longer feels normal?
Life insurance can help pay for the expenses that will continue for your children and dependents after you die. These expenses can include:
- house payments (rent or mortgage)
- debt
- current and future education needs (see below)
- end-of-life costs
- child living expenses
- childcare
After reading that list, you might find yourself thinking, "How would any of those expenses be covered without life insurance?" That is, indeed, the million-dollar question.
A good insurance policy can help cover major expenses that felt far away, like college tuition.
When you sit down with a qualified life insurance agent, you do a lot of thinking about what you want the future to look like.
Do you want your child (or children) to go to college? If so, are we talking about a state school? Or do you want them to have enough money to go to out-of-state?
Do you want your family to have more choices or less? This is a deeply personal question, and one that really has no "right" answer. That's one of the hidden values of going through this process. You're force to come to some kind of decision for yourself, and for your family, right here, right now.
The process can guide you to figuring out who your life insurance beneficiary should be.
A single parent can purchase term insurance - usually for less money than a permanent life insurance policy would be.
The world of life insurance is wide and varied these days, but here are a few standard options to get you started on finding the policy that is best for you as a single parent.
Term Life Insurance
If funds are limited or cash flow is tight, as it often can be for a single parent, then term insurance is a great option. Term insurance offers a cash payout to your beneficiaries if you die during the term. In exchange for the death benefit, you pay a monthly premium to keep the policy active. With a term policy, if you stop paying the premium, the policy will end and the benefit goes away. It is temporary coverage for as long as you need it or can afford to pay it.
A single parent can typically find a premium payment on a term policy in a budget they can afford. Also note that with any insurance policy, you have to pass underwriting to be issued the policy and have your price determined.
Permanent Life Insurance
Next, there are permanent life insurance policies. These often come with a higher cost per month premium for a similar death benefit as a term policy of the same size. However, a permanent insurance policy will accumulate cash value in addition to the death benefit.
The cash value inside the policy can be used or borrowed against after a certain amount of time. When you borrow money from a permanent insurance policy, you’re using the cash value as collateral and the borrowing rates tend to be relatively low.
If the idea of a more permanent policy sounds appealing, but you are worried about having the cash on hand to pay the premiums every month, then a universal life insurance policy might be more your style.
As a single parent with one income, flexibility is key. With a universal life policy, you can make more flexible payment amounts on the policy as needed. If you are considering a universal policy, it’s a good idea to work with an insurance agent to make sure you set up a policy that is best for your needs and situation.
How do I find a professional to talk to about this?
There's no better way to move forward with purchasing life insurance than to reach out to a qualified professional. The Hanna Agency has one endeavor, and that is to educate people about their choices. We are not trying to sell you insurance. However, we are able to, under certain circumstances, to do so, if that is what you want.
There are many ways to reach out to us. The fastest might be using the form below:
